Death is a nasty business. But it’s a business, nonetheless.
As our parents and family members age, it’s our job to deal with the aftermath of their passing. This is never an easy subject to discuss, but if left unaddressed, you could end up with less than nothing.
If you’re fortunate enough to land an inheritance, you’ll want to hold on to as much of it as possible — for paying bills, adding to your savings account, or buying that Harley-Davidson you’ve always wanted.
But, things come up. Dreams can get sucked right into someone else’s wallet if you’re not careful.
Here are a few things you can do to prevent your inheritance from being ripped from under you.
How to Protect Your Inheritance
1. Take great care of your parents.
This is easier said than done with today’s busy lives. You’re already overbooked and have little time for anything else, but by leaving your aging parents alone, you place burdens and fears on the hearts and minds of the people who never left you when you needed them. Taking care of them yourself will save money on live-ins, assisted living arrangements, caretakers, etc.
2. Make sure their bills are up-to-date.
There’s nothing like getting hit with a stack of unpaid bills after a family member passes away. Organize their bills, or take them over if they’ll let you. If you’re organized, you’ll find it’s not that much more to deal with. You can always do it in Stealth Mode, too, if they don’t want you doing it for them. Just make sure everything’s caught up, and don’t belittle them if it’s not.
3. Check on their investments.
Make sure their investments are protected and in a place that’s earning them the maximum amount possible. Playing with the stock market may or may not be for them — if not, there are annuities and bonds that will help ease that post-workforce monetary strain. By having that extra income from the monthly dividends, they’ll have peace of mind, as will you.
4. Deal with the taxes beforehand.
If the time comes and you’re ready to claim your inheritance, be sure to have taxes drawn before you take it. Otherwise, you’ll spend it or lock it up, and you’ll be left owing taxes at the end of the year.
5. Consider tax-free alternatives.
If you can, roll your inheritance over into an IRA or Roth retirement fund so you’ll avoid paying taxes until you’re ready to use it.
6. Sell everything.
If you’re not going to use your mom’s china, sell it. There’s no point in holding on to something simply because it belonged to someone you loved. Choose useful pieces to keep, and perhaps a trinket or two, then get rid of the rest. Don’t make your home a haven for yours AND other people’s stuff.
Money you make from the sale of the goods can be invested with the rest of your inheritance, or put towards paying off debt. Wouldn’t your parents be happy to know they helped you climb out from under the mountain of debt that regularly rests on your shoulders?
7. When it comes to where and how to sell your stuff, choose wisely.
There are tag sales, estate sales, Ebay, Craigslist, and more. How much time and energy do you have to get rid of it? We didn’t have a lot of time and went with a tag sale option. It was a disaster. We ended up getting a fraction of what the pieces of furniture were worth. And it hurt more to know that Mom would have never sold that stuff for those prices. Estate sales are about the same; unless you can dictate your minimum accepting price, there will be little you can do about winning bids.
Ebay, Craigslist, and the like will allow you to put your goods up for the prices you want, but you’ll have to do it yourself — which is time-consuming.
What’s your advice for protecting your inheritance?